It was the story of two brothers who promoted concerts in the rustbelt town of Buffalo and dreamed of making it big in the movies.

Bob and Harvey Weinstein went on to reshape Hollywood with their company Miramax, collecting armfuls of Oscars and launching the careers of some of the most influential names in American cinema, including the directors Quentin Tarantino, Steven Soderbergh and Kevin Smith, bringing independent cinema to a wider audience. They sold Miramax to Walt Disney but remained at the helm for more than a decade before chaffing at the corporate bit, falling victim to their own hubris with a slate of big budgets films and quitting in 2005.

Then, this week, the final credits started to roll. Disney began to close Miramax offices as part of a plan to shrink the release slate to just three films a year and consolidate it with the Disney studios in Burbank, although the company denied that it was closing the business entirely.

Smith, who shot to fame with Clerks, about two deadbeat shop assistants, said in his blog that he was "crushed" to see Miramax "pass into history".

Without Miramax, he would still be a New Jersey clerk himself, he wrote. "What Harvey and Bob built from scratch resembled an old studio star-factory; but this time, the stars were the film-makers. It was a gang (of New York), and like any good gang, it was dripping with street cred. Just being a part of that gang sent a message: I run with rebels."The Weinsteins got into the film business by acquiring cheap foreign films, then recutting and distributing them in the United States; one of the first was The Secret Policeman's Ball in 1981. Their big breakthrough was acquiring Soderbergh's Sex, Lies and Videotape, which they bought for $1m and went on to take $25m. It scored other hits with The Crying Game and Pedro Almodóvar's Tie Me Up! Tie Me Down! and Peter Greenaway's The Cook, the Thief, His Wife & Her Lover.

Patrons of independents

"You can't underestimate the influence they had in the 1980s and especially the 1990s," says Ali Jaafar, international editor of the trade magazine Variety. "They took independent cinema to the mainstream in America. They were winning best picture Oscars, taking $100m box offices. You could argue that they were patrons of the independent scene and of foreign film-makers finding a home in the US. Harvey Weinstein has his flaws, but no one can deny he loves movies."

Their success, and the profit margins on the low-budget productions, lured the studios, which were also keen to tap into the new mood in cinema. In 1993, Disney offered the pair $80m for the business but left them in charge.

Miramax had become a producer as well as a distributor and for the first few years of the relationship with Disney, it performed well with hits including Tarantino's Pulp Fiction, The English Patient, Shakespeare in Love and Good Will Hunting. While the brothers were with Disney, they earned 220 Oscar nominations and won 53. But as they enjoyed more success, so the ambitions and budgets grew. Its biggest hit was Chicago, which made $300m worldwide.

"They changed everything, and sometimes I wonder if it was for the better," says Mike Goodridge, editor of Screen International. "They were brilliant at marketing and championing films; smaller, marginal films like The Crying Game, foreign language films … But then they began thinking, 'we can make big budget films now' and defied their own model and that would lead to their demise.

"Big stars would work for very little money in an independent, and they were making enormous returns on low-budget films. So all the others jumped in and suddenly it was a studio business – and no star worth their salt will take a pay cut for a studio – so the budgets are bigger and the business model went to pot. There were too many of these kinds of films; they cost too much, and audiences weren't interested. Look at the Oscars last year with the likes of Milk and The Reader. No one went to see them. But you can't stay in that small space once you have had enormous success. You can't suppress someone like Harvey."

Commercial flop

The relationship with Miramax's corporate bosses deteriorated and Harvey Weinstein and Disney's then chief executive Michael Eisner famously clashed over financial and creative issues. Goodridge identifies Cold Mountain as a key moment as relations soured. Weinstein had shared the costs of other big budget films with rival studios but financed Cold Mountain entirely. It was both a critical and a commercial flop. Another flashpoint came when Disney refused to distribute Fahrenheit 9/11, Michael Moore's critical reflection on George Bush's US.They split with Disney in 2005, and the brothers set up their own business, The Weinstein Company, which will be aiming for further Oscar glory this year with Tarantino's latest offering, Inglourious Basterds, but is also finding life difficult financially.

Miramax continued under the aegis of the well-regarded Daniel Battsek, who continued to put out award-winning films including No Country for Old Men and There Will be Blood.

But it became clear that Miramax had a diminished future with Disney. Battsek said he would quit in October when Disney said it would shift market­ing, distribution and other back-office functions to its Burbank headquarters. On Thursday, it was reported in the US that Miramax was being ditched for good, which Disney claims is not the case. It still has six unreleased films, including The Tempest, with Helen Mirren as Prospero.

"I am feeling very nostalgic," said Harvey Weinstein on hearing rumours of its closure. "I know the movies made on my and my brother Bob's watch will live on." He said the brothers would "love the opportunity" to buy back the name – an amalgam of their parents' names, Max and Miriam. "There isn't much in the world that would make our 83-year old mother happier."